Davie officials violated purchasing rules, county investigators say

Several high-ranking town officials and employees violated state law by splitting purchases across their town-issued credit cards to avoid the bid process, failing to get proper approval for purchases, and attempting to conceal malfeasance from investigators with the Broward Office of the Inspector General, according to a report by that agency.

"The consistent and prolific pattern of the deceptions we detail herein is certainly disconcerting," Inspector General John Scott said in a 73-page preliminary report that he forwarded to town officials Friday.

"The OIG investigation revealed, in sum, that there was no adequate or functioning internal control system over the town's [procurement card] activities which could be relied upon to prevent fraud, waste and abuse," Scott said.

As part of an effort to help local governments identify and eliminate abuses, the office reviewed procurement card purchases at various cities and towns from October 2012 through July 2014.

In Davie, investigators looked at a small sample — 150 transactions — and found that almost half of them violated policy, with approximately $161,000 in purchases.

Investigators singled out the town's finance and purchasing staff as the department that had the greatest vulnerability to fraud, waste or abuse. In a review of that department, investigators found that four employees, each with their own procurement card, oversaw $9.3 million in transactions during the 21-month review time frame.

"Any charges made by these individuals can be initiated, coded and approved by them; no other review is required," investigators said.

The procurement cards are intended for purchases of goods and services for town business, and there are limits on purchases. By putting bids out to vendors, cities and towns can obtain the best price and thoroughly evaluate proposals. Municipalities go with the lowest and best bidder.

Purchases over $2,500 require three informal written bids and the procurement manager's approval. Purchases over $5,000 require the town council's approval on contracts. Purchases over $25,000 require public advertising and a sealed bid process.

The investigation revealed that some officials circumvented the process by splitting purchases to stay under spending limits.

Town officials declined comment and it was unclear Friday evening what discipline or charges any employees named in the report might face.

In one instance, Matthew Mlodzinski, the senior operations manager in the Parks, Recreation and Cultural Arts Department, told a secretary to split transactions on a card for party rental supplies for a Fourth of July celebration and the Orange Blossom Festival in 2014, according to the report.

Mlodzinski admitted to investigators that he ordered the split in order to avoid having to get a bid for the job, and asked vendors to use a separate company name on split invoices to avoid detection by the finance department, according to the report.

In another finding, investigators found that Mark Collins, the public works and capital projects director, split a total of $8,465 over four purchases in 11 days in 2012 to pay for maintenance at a recreational field.

Collins divided the payments to keep under the $2,500 limit, according to investigators. In an interview, Collins admitted that he should have submitted the work through the town's purchasing division and that the invoices were not properly authorized.

Building official Brian Dillon admitted to investigators that he split a total of $9,424 in furniture purchases across six invoices to avoid exceeding the $2,500 threshold over a six-month period in 2014, according to the report.

Investigators found 18 transactions where the person who made the purchase also approved the transaction — a violation. In one example, an assistant fire chief, who was not named in the report, paid $500 to a local restaurant on his card and approved his own purchase.

According to the report, investigators found that the purchasing staff failed to detect "obvious violations" and that multiple times during the investigation provided misleading information and documents.

As a result of the investigation, the town has taken corrective action, according to the report, including creating a list of authorized procurement card approvers and instituting a policy prohibiting users from approving their own purchases.